Thailand’s economy grew 2.5 percent in the second quarter as returning foreign tourists failed to offset high inflation and concerns over regional tensions, the country’s main economic agency said yesterday.
Southeast Asia’s second-largest economy was hit hard during the COVID-19 pandemic, although visitor numbers are slowly improving with the relaxation of travel rules since May.
Russia’s invasion of Ukraine and tension over Taiwan could put any economic recovery at risk, the Thai Office of National Economic and Social Development Council (NESDC) said.
Photo: AP
“We have to continue monitoring to see how long counteraction from China over Taiwan will last,” NESDC Secretary General Danucha Pichayanan said, referring to Chinese military exercises around Taiwan proper, which Beijing initiated after US House of Representatives Speaker Nancy Pelosi visited Taipei on Aug. 2 and 3.
“The relaxing of our COVID controls, the recovery of tourism are factors that support the growth,” he said.
The agency said that GDP rose 2.5 percent in the April-to-June quarter compared with the same period a year earlier — well below the anticipated growth of 3 percent.
The NESDC also revised the expected full-year growth rate from 2.5 to 3.5 percent to 2.7 to 3.2 percent.
Kasikorn Research Center economist Charl Kengchon called the results a “mixed bag,” with the tourism boost failing to lift growth.
“I think that is because inflation hit a 14-year high in June, so it is a drag on spending both [in the] household sector and business,” he said.
Inflation in June reached 7.7 percent and was at 6.5 percent for the quarter, the NESDC said.
The effects of the war in Ukraine and tensions in the Taiwan Strait were also a worry, affecting supply chains, Charl said.
“We expect Thailand exports to cool in tandem with the global economic growth next year, so we have to rely so much on tourism,” he said.
Thailand welcomed about 40 million people annually before the pandemic, and has set ambitious targets on arrivals for the coming year in the hope of coaxing life back into the damaged tourist sector.
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